By Maria Martinez
BERLIN (Reuters) – Germany’s manufacturing sector showed signs of recovery in March, with its first production increase in nearly two years, a business survey showed on Tuesday.
The HCOB Germany Manufacturing PMI compiled by S&P Global rose to 48.3 in March from 46.5 the previous month, taking the index to its highest level since August 2022, although remaining below the 50.0 threshold indicating growth.
The uptick was primarily driven by the intermediate goods sector, while production in the investment goods sector remained stable, and the consumer goods sector saw a slight decline, the survey showed.
New orders grew for the first time in three years, with domestic sales increasing as customers began restocking inventories.
“Growth has been a foreign concept for German manufacturing for nearly two years,” said Cyrus de la Rubia, chief economist at Hamburg Commercial Bank AG. “In March, however, production in the manufacturing sector increased for the first time, and not insignificantly.”
Special factors seem to be at play here, with U.S. importers potentially advancing imports to avoid impending tariffs, de la Rubia said.
Germany’s economic outlook has darkened somewhat since U.S. President Donald Trump announced a 25% tariff on imported vehicles.
The outlook for future growth brightened significantly, reaching its most optimistic level in over three years, partly due to an announced spending spree.
(Reporting by Maria Martinez; Editing by Hugh Lawson)
